PerkinElmer Q4 revenues drop 28% on COVID headwinds

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PerkinElmer on Tuesday reported fourth-quarter revenues from continuing operations of $741 million, a decline of 28% from $1.03 billion in Q4 2021. The decline was mainly due to a 45% year-over-year decrease in Diagnostics business revenues.

For the quarter ended January 1, revenues from continuing operations in the Discovery & Analytical Solutions business were $347 million, up 9% compared with $318 million in Q4 2021. Q4 revenues in the Diagnostics business were $394 million compared with $710 million in the prior-year quarter.

The firm booked Q4 revenues of $1.09 billion from the combination of continuing operations and discontinued operations. Discontinued operations consist of the Applied, Food, and Enterprise Services (AES) businesses currently held for sale.

“We continue to successfully navigate an evolving macroenvironment, particularly in China, while staying tremendously focused on executing our upcoming divestiture ... which we expect to complete before the end of March,” Prahlad Singh, president and CEO of PerkinElmer, said during a conference call to discuss the financial results.

The upcoming split of the company includes roughly 6,000 employees who will be part of the divestiture.

“As it pertains to the future of our Life Science and Diagnostics business, which is going to be renamed and rebranded in the months following the close of the divestiture, a significant amount of work has already taken place to prepare for this transition,” Singh said.

He noted that the firm has obtained the CE Mark for the Accentis high-throughput, random-access chemiluminescent diagnostic testing platform, and initial commercial installations are underway.

“While the test menu for this platform will continue to ramp over the next several years, it marked a multiyear effort of significant development to bring this next-generation platform to market,” Singh said.

The company plans to bring the new system to the U.S. market this coming year, he said.

“With the low- and medium-throughput platforms that were added with the acquisition of [Immunodiagnostic Systems] in 2021, the initial launch of the Accentis now provides a complete portfolio of chemiluminescent analyzer platforms spanning all throughputs to support our full spectrum of customers,” Singh added.

PerkinElmer reported Q4 net income of $137.7 million, or $.85 per share from continuing operations, compared with $190.2 million, or $1.45 per share from continuing operations, in Q4 2021. Its combined adjusted EPS for the fourth quarter was $1.70.

For full-year 2022, the company booked $3.31 billion, down 14% compared with $3.83 billion in 2021.

Its 2022 net income was $579.2 million, or $4.13 per share from continuing operations, compared with $943.2 million, or $7.62 per share from continuing operations, in 2021.

Full-year revenues from continuing operations in the Discovery & Analytical Solutions business were $1.29 billion, up 44% compared with $898 million in 2021, while full-year revenues from Diagnostics were $2.02 billion, down 31% compared with $2.93 billion in 2021.

For full-year 2023, the company forecasts total revenue from continuing operations of $2.94 billion and adjusted EPS of $5.05. The guidance assumes no contribution from COVID-related revenues.

“It was encouraging to see our Life Science and Diagnostics business finish off the year on a strong note resulting in 9% non-COVID organic growth for the full year,” Singh said. “This was despite an approximate 300 basis points headwind from the lockdowns in China negatively impacting our immunodiagnostics business, which we had assumed in our most recent guidance.”

PerkinElmer continues to see an impact from the change in COVID policy in China and assumes that its immunodiagnostics business there will not return to normal until the second half of 2023.

“As it relates to COVID, we have been a significant player in the response to the pandemic with both lab-based PCR and several government lab contracts we participated in,” Singh said. “With the testing mandates now ending in most areas around the world, it has recently resulted in a strict and dramatic decline in the demand for lab-based PCR tests and supplemental lab capacity.”

PerkinElmer shares were trading down less than 1% at $138.01 in afternoon trading on the New York Stock Exchange.

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